Discretionary Policy versus Non-Discretionary Policy in the Economic Adjustment Process
AbstractThe study aims to examine the concept of automatic fiscal stabilization in the context of macroeconomic adjustment policies. To this end, first a conceptual distinction between discretionary public adjustment policies and non-discretionary ones is achieved. Second, sufficient and necessary attributes for an automatic fiscal stabilizer are identified and examined, in order to obtain a definition of this instrument. The whole research approach is characterized by a logical and abstract way of thinking, to provide a general and non-contextual result. Finally, a general mechanism of action of automatic fiscal stabilizers is proposed, by introducing the basic concepts of action base and of action rate of such an instrument.
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Bibliographic InfoArticle provided by Institute for Economic Forecasting in its journal Romanian Journal for Economic Forecasting.
Volume (Year): (2010)
Issue (Month): 4 (December)
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sustainability; fiscal policy; automatic fiscal stabilizers; discretionary versus nondiscretionary; principle of the minimal action;
Find related papers by JEL classification:
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
- H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
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